Aave has published a report detailing a significant loss incident involving a user who attempted to exchange $50.43 million worth of aEthUSDT for aEthAAVE through the CoW Swap router on Aave's platform. The transaction, which faced a 99.9% price impact due to insufficient market liquidity, resulted in the user receiving only 327 aEthAAVE, valued at approximately $36,000. Despite warnings, the user proceeded with the transaction, incurring $110,000 in fees, which Aave plans to refund after identity verification.
In response, Aave will introduce the "Aave Shield" feature to automatically block transactions with price impacts over 25%, aiming to protect users from substantial losses due to similar errors. The Aave protocol itself was not affected by the incident, as the loss occurred at the third-party protocol level.
Aave to Launch 'Aave Shield' After $50M aEthAAVE Exchange Loss
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